Policy rate views: Keep rates and carry on
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Inflation Update: Price-rise surprises at 2.1% in February
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Monthly Economic Update: Somewhat less dovish
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The Gist
A daily dose of market updates and smart investment strategies to guide your portfolio decisions
Today's Report
Your Morning Fix
- Wall Street closed higher on Tuesday amid investor analysis of consumer sentiment data and optimism about a potentially softer trade policy stance from President Donald Trump, who hinted at a selective enforcement of automobile tariffs.
- Moody’s reported that the US’ fiscal strength is expected to decline over several years due to widening budget deficits and less affordable debt.
- The Bangko Sentral ng Pilipinas (BSP) anticipates a deficit in the balance of payments and a wider current account deficit this year, given global trade uncertainties and geopolitical factors.
- Banks and financial institutions supervised by the BSP reportedly incurred PHP 5.82 billion in losses from cyberattacks in 2024, a 2.6% increase from the previous year, an official said.
- Megawide Construction Corp. is set to offer up to PHP 6 billion in preferred shares from March 26 to April 4 to fund the refinancing Series 4 shares, real estate growth projects, and other general expenses.
Our Portfolio Recommendation
For the peso portfolio, we recommend a neutral 50-50 split between fixed income and equities. While the Bangko Sentral ng Pilipinas and US Fed rate cuts support risk assets, potential headwinds from tariffs and market volatility may call for a balanced approach to capture fixed income gains while maintaining equity exposure. In the dollar portfolio, we maintain an overweight stance on equities at 55% versus 45% in fixed income, driven by US market strength and robust corporate earnings. Though Fed rate cuts are anticipated, we remain cautious of tariff impacts and stagflation risks, balancing equity upside potential with fixed income stability.
| 2025 Metrobank Forecast | 2026 Metrobank Forecast | 2027-2029 Metrobank Forecast | |
|---|---|---|---|
| GDP | 5.8% | 6.2% | 6.0% |
| Inflation | 3.1% | 3.2% | 3.0% |
| BSP Target Reverse Repurchase Rate | 5.25% | 4.50% | 5.00% |
| Federal Funds Rate | 4.00% | 3.25% | 4.00% |
| USD/PHP | 57.9 | 56.5 | 55.0 |
CHART OF THE DAY
Chart of the Day
US business activity rises in March
S&P Global’s flash US Composite PMI Output Index, which tracks the manufacturing and services sectors, increased to 53.5 this month from 51.6 in February. A reading above 50 indicates expansion in the private sector. The services sector accounted for the rise in the PMI, while the manufacturing sector contracted. The PMI suggests the economy was regaining speed after hitting a soft patch halfway through the first quarter, in part because of snowstorms and freezing temperatures. Sources: Reuters, Bloomberg
Featured Reports
More Reads
USD/PHP closes slightly lower on two-way activity
- The USD/PHP exchange rate opened 3 centavos lower at 57.30 on Monday, as the dollar recovered overnight.
- The local currency pair settled within the 57.31-36 area, before a spike in offshore prices caused dealers to chase the intraday high of 57.39.
- Suspected local supply emerged at this high level, leading to a 10-centavo retracement back to intraday lows of 57.29.
- The USD/PHP exchange rate ultimately closed at 57.32, or 1 centavo lower day-on-day.
- The current support levels of USD/PHP are at 57.10/20 while the resistance levels are at 57.40/50.
READ MORE
Local GS sees some interest in short-dated bonds
- The local government securities (GS) market remained quiet on Monday, with bond yields opening unchanged from Friday’s close.
- The T-bill auction results were mixed, with 3- and 6-month tenors printing 4-6 basis points (bps) higher, while the 1-Year bill outperformed by 2 bps lower week-on-week.
- Clients focused on the front-end of the curve, awaiting clarity on the Bureau of the Treasury’s (BTr) borrowing plans, while some interest was seen in the 7- to 10-Year space.
- Market focus will shift to the release of the 2nd quarter borrowing program of the BTr. We expect issuances to remain concentrated in the 10- to 25-Year space.
- The BTr will reissue Fixed Rate Treasury Notes 7-64 and 25-12 for today’s 3- and 25-Year bond auction.
READ MORE
PSEi continues to decline amid cautious sentiment
- The Philippine Stock Exchange index (PSEi) ended 74.73 points lower at 6,192.02 on Monday, after a delayed session was weighed down by profit-taking and caution ahead of key local macroeconomic data.
- All sectors ended negative, with Services (-2.32%) and Property (-1.39%) taking the biggest hits.
- On the upside, Emperador Inc. (+3.67%) led gainers, followed by Aboitiz Equity Ventures Inc. (+0.93%) and Jollibee Foods Corp. (+0.84%).
- Meanwhile, JG Summit Holdings Inc. (-4.57%), Semirara Mining & Power Corp. (-4.14%), and Century Food Pacific Inc. (-3.67%) were the biggest drags.
- Risk appetite is expected to stay muted as investors await the US Gross Domestic Product report for the 1st quarter of 2025 and the local trade data for further direction.
READ MORE
USD/PHP closes slightly lower on two-way activity
- The USD/PHP exchange rate opened 3 centavos lower at 57.30 on Monday, as the dollar recovered overnight.
- The local currency pair settled within the 57.31-36 area, before a spike in offshore prices caused dealers to chase the intraday high of 57.39.
- Suspected local supply emerged at this high level, leading to a 10-centavo retracement back to intraday lows of 57.29.
- The USD/PHP exchange rate ultimately closed at 57.32, or 1 centavo lower day-on-day.
- The current support levels of USD/PHP are at 57.10/20 while the resistance levels are at 57.40/50.
READ MORE
Local GS sees some interest in short-dated bonds
- The local government securities (GS) market remained quiet on Monday, with bond yields opening unchanged from Friday’s close.
- The T-bill auction results were mixed, with 3- and 6-month tenors printing 4-6 basis points (bps) higher, while the 1-Year bill outperformed by 2 bps lower week-on-week.
- Clients focused on the front-end of the curve, awaiting clarity on the Bureau of the Treasury’s (BTr) borrowing plans, while some interest was seen in the 7- to 10-Year space.
- Market focus will shift to the release of the 2nd quarter borrowing program of the BTr. We expect issuances to remain concentrated in the 10- to 25-Year space.
- The BTr will reissue Fixed Rate Treasury Notes 7-64 and 25-12 for today’s 3- and 25-Year bond auction.
READ MORE
PSEi continues to decline amid cautious sentiment
- The Philippine Stock Exchange index (PSEi) ended 74.73 points lower at 6,192.02 on Monday, after a delayed session was weighed down by profit-taking and caution ahead of key local macroeconomic data.
- All sectors ended negative, with Services (-2.32%) and Property (-1.39%) taking the biggest hits.
- On the upside, Emperador Inc. (+3.67%) led gainers, followed by Aboitiz Equity Ventures Inc. (+0.93%) and Jollibee Foods Corp. (+0.84%).
- Meanwhile, JG Summit Holdings Inc. (-4.57%), Semirara Mining & Power Corp. (-4.14%), and Century Food Pacific Inc. (-3.67%) were the biggest drags.
- Risk appetite is expected to stay muted as investors await the US Gross Domestic Product report for the 1st quarter of 2025 and the local trade data for further direction.
READ MORE